Monday, September 17, 2012

The Obligations of Transparency--Omnidirectionality, Mutuality and Good Faith

I have been writing of the obligations of transparency in its two principal forms.  As communicative transparency, this embodies the obligation on the part of the speaker to provide a sufficient amount of information in a timely manner that conveys what is necessary for stakeholders to understand actions undertaken, or that acknowledges communication received or that explains the nature of basis of a decision.  As engagement transparency, it provides  information sufficient for stakeholders to fully participate in decision making to the extent appropriate to the decision.  I have also suggested the challenges to institutional programs of actions in the face of failures of communicative and engagement transparency, and the potential for significantly adverse distraction from even significantly positive institutional objectives.

(Pix (c) Larry Catá Backer 2012)


Both forms of transparency assume only the perspective of the holder of information.  It suggests, in effect, that transparency involves a unidirectional activity from a harvester and distributor of information to a set of information consumers.  But reality paints a different picture. First, every participant in transparency activity serves simultaneously as a producer and consumer of information. Second, interactivity posits not merely the obligation to produce information but also the obligation to receive it.

In a prior post I suggested the consequences of a failures to produce and distribute information in a unidirectional context (e.g., On the Importance of Transparency and the Relentless Pursuit of Knowledge in the Sandusky Affair--Governance in a New Era). This post suggests the consequences of failures of interpretation, and the distortions of transparency possible where transparency is conducted as a uni-directional exercise and where the parties acknowledge a right to information but not the obligation to receive it.  Failures of mutuality can distort the communicative and engagement aspects of transparency. Penn State again provides a good illustration of the failures of mutuality in communication--in which the production of communication that adheres to the forms of transparency might mask agendas far removed from the formal object of a transparency project.



Omnidirectional transparency produces a closer approximation of information welfare maximization, the failures of which produces not merely informational asymmetries but also the very real likelihood that information will be misinterpreted and analysis (and action) distorted.  Information harvesting and distribution, like information consumption is a constant and interactive activity.

The communicative aspects of transparency has another and significant consequence--communication (in either form) is incomplete in the absence of an affirmative obligation of a recipient of communication to listen--that is to receive the communication, to evaluate the communication in accordance with its terms, and to convey responses (as communication or engagement) to the extent appropriate.  And thus, transparency is best understood as neither a means of information conveyance down within hierarchical systems or of the harvesting of information from the bottom up, or even as the provision of information for a single engagement.  Rather, transparency embraces a dynamic communication grounded in mutuality in which there is neither fear of retaliation in vertical relationships nor strategic use of the forms of communication to undermine the functional objectives of transparency. 

Consider the failures of omnidirectional transparency in the context of the debate about the legitimacy of Penn State's acceptance of the NCAA sanctions.  As we saw in the last post (e.g., On the Importance of Transparency and the Relentless Pursuit of Knowledge in the Sandusky Affair--Governance in a New Era) it was clear that information was harvested and distributed to a particular end.  That information was received, in the sense that it communicated knowledge that might, standing alone, feed a sense that its meaning necessarily required the conclusion that the actions on which the university bases its conduct going forward were illegitimate as founded on falsehood.  But that interpretation is possible only in the absence of a sense of the omnidirectional nature of transparency and a determination to refuse to receive information that has also been communicated but absent from the calculus of interpretation and conclusion.

But to what extent are conclusions based on one set if information changed when considering in light of another set:  Consider in this light the following statement of President Rodney Erickson recently made:

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I received a message to call NCAA President Emmert on Friday, July 13th as I was leaving the Scranton campus after the Board of Trustees meeting.  President Emmert indicated that now that the Freeh Report was issued, the University should begin work to respond to the November 17th letter I received from the NCAA following the Grand Jury presentment.  Dr. Emmert indicated that we would have until the first week or so of August to develop our response.

Dr. Emmert called me back after the weekend and indicated that both the NCAA division I board and the NCAA executive committee were shocked by the Sandusky trial and the facts provided in the Freeh Report, and that an overwhelming majority of the boards “wanted blood,” to shut down Penn State’s football program for multiple years.  He said we should put the November 17th letter aside, that things were moving fast, and not in a good direction for Penn State.  He indicated that the nature of the violations was such that sanctions would not go through the normal Committee on Infractions route, but rather be taken up directly by the Board in this case, and that the Board had the power to go this route.

Emmert indicated that our only chance to avoid a death penalty along with sanctions might be to opt for a consent decree that would have unprecedented penalties but would allow us to keep our program running.  He noted a hefty fine, which actually became larger following discussions with the Board during the week, loss of scholarships, and a ban on post-season play.  He indicated that the only reason Penn State might be given this option was the actions that the Board of Trustees and administration had taken during the past eight-plus months to replace the individuals that were relieved of their duties last November, commissioning the Freeh investigation, and the fact that the University had no previous major infractions.

Our legal team began discussions with NCAA legal counsel on Monday, July 16th, and it was clear that the NCAA was not interested in negotiating the terms of the consent decree.  This was a “take it or leave it” proposition, a “cram-down” in bankruptcy terms, despite our attempts to push back on the sanctions as we learned about them.  We didn’t receive the draft consent decree in writing until the early hours of Saturday morning.

President Emmert and the NCAA staff indicated throughout the week that it was not at all clear that the NCAA board members would accept the consent decree without involving the death penalty or penalties even more sever, and we did not know until late Saturday that the NCAA board was willing to go along with the consent decree option.  Once we had the consent decree in writing, we pushed back again on the sanctions, but were given only very limited latitude on some clarifications.

During the week, I had kept the Board of Trustees leadership, Chair Peetz and Vice Chair Masser, briefed that there were discussions with the NCAA that were moving along very quickly, that the sanctions were going to be sever in any case, and that the NCAA has said emphatically that any leak of these discussions by Penn State would take any deal off the table and the NCAA would take the other route.  I indicated to the executive committee of the Board late in the week where we stood, and later on Sunday, I, along with legal counsel, spelled out the difficult, full terms of the consent decree.  There was a strong consensus on the executive committee that the alternative to the consent decree was far worse, and that we should take the deal, which I signed late on Sunday evening.  Before signing, however, I asked counsel for their legal opinion, and they indicated after review of the University’s charter and bylaws that I was within my authority as president to sign the consent decree.

This was far and away the most difficult decision I’ve ever made in my 40-year professional career.  There were many reasons why I opted for the consent decree:

1.     The prospect of several years of a death penalty for football has overwhelmingly negative consequences.  First, we would have lost the entire football revenue base that helps to support 27 of Penn State’s other varsity sports.  That would have had a devastating effect of our other 700 student athletes.  At the same time, we would have continuing costs for the football program including operating and maintenance of facilities, coaches’ contracts, and the costs of other employees with no offsetting revenues from television or gate receipts or sponsorships.
2.     An empty stadium for multiple years would have a drastic impact on the economy of central Pennsylvania and beyond.  Many businesses depend upon the football season for a significant share of their net revenues during the year.
3.     From the time I first talked with Bill O’Brien last winter about the prospects of NCAA sanctions, Coach O’Brien said first and foremost he wants us to play and he wants us to play on television.  The consent decree makes that possible.  I can’t thank Coach O’Brien and our football players enough for the character and determination and team spirit they have displayed throughout this difficult time.
4.     Challenging the NCAA actions would have meant a high probability of multiple years in court while we didn’t play football and with a high likelihood that, as Gene Marsh has already indicated, we would lose in legal proceedings.  Such is the nature of a membership organization.
5.     I was also very concerned about the possible actions of the Big Ten Conference if we did not opt for the consent decree.  I believe there was substantial risk that challenging in court the NCAA’s sanctions—whether meted out directly by the Board or the Committee on Infractions – while not playing for several years, may have led to our expulsion from the conference, with all of the terrible effects that would have on our entire intercollegiate athletic program as well as on our academic programs so many of which are intertwined with other Big Ten universities through the Committee on Institutional Cooperation.
6.     Finally, I felt strongly that the consent decree would provide a roadmap for us to make changes and move forward.  Fighting the NCAA would both take years and send a signal to the nation that Penn State is really, in the end, mainly about football.  It will be difficult, to say the least, dealing with the NCAA sanctions, but having the opportunity to move on has considerable value, too.
7.     The consent decree states that the agreement can be reopened by mutual consent of the parties.  I believe our focus now should be on continuing the task of implementing recommendations of the Freeh Report, working closely with the Athletics Integrity Monitor, and showing the world that we have the spirit and the dedication to emerge from this difficult period as an even stronger University.

I believed when I signed the consent decree that it was the better of the two crushing alternatives in the most difficult decision I’ve had to make, and I stand by that decision today.

Thank you.    
And consider this information in the context of a different story emerging in the national press: Don Van Natta, Jr., On Death's Door, ESPN, Aug. 2, 2012.

This spring, on the NCAA website, a page defined the various penalties facing universities that are found to violate the NCAA's rules. The first definition was this: "Death penalty: … a phrase used by media to describe the most serious NCAA penalties possible. It is not a formal NCAA term. It applies only to repeat [offenses] … " But sometime shortly after the Freeh report was made public, the webpage was removed. Bob Williams, an NCAA spokesman, says the page can now be found at a new link.
Whatever the reason for the webpage's removal, the old rules and procedures were being ignored. Marsh spoke on Monday, July 16, with Penn State's general counsel, Stephen Dunham, and outside counsel Frank Guadagnino, who prepared for discussions that week on what the penalties might be. Typically, sanctions are decided by the infractions committee process; neither the full NCAA board of Division I presidents nor its executive committee takes part. In this case, both groups were being consulted via conference call with Emmert. Marsh said he and his colleagues quickly concluded that there was no use trying to persuade the NCAA to go the traditional route. "Their minds were made up," he said.
. . . . .
The next day, Friday, July 20, while the public focus was on whether Joe Paterno's statue outside Beaver Stadium would be taken down, Erickson met with several trustees in his office. He said nothing about the discussions with the NCAA. In fact, while he had been consulting with Peetz and other trustees on the executive committee, Erickson had never mentioned the threat of penalties to the full board.
Back at NCAA headquarters in Indianapolis, Emmert spoke by phone with Erickson, who listened attentively but also continued pushing his arguments, university officials say. Sometime that Friday, Emmert and his colleagues decided to drop the death penalty and move forward with an agreement between Penn State and the NCAA outlining the package of sanctions. Says one Penn State official, "Erickson would later say, 'Emmert was our friend in this.'"
. . . . .
That weekend, only Peetz and her executive committee were told about the consent decree or that sanctions were imminent. Those trustees did not tell their colleagues. This was by necessity, university officials say. The NCAA had warned Penn State that if there was a leak about proposed sanctions to the media, the discussions would end and the death penalty would be all but certain.

On Sunday, July 22, workers arrived at the Paterno statue before dawn. By 8:40 a.m., the statue was removed and carted by forklift inside Beaver Stadium. A trustee said hopefully that morning, "Maybe this will help us with the NCAA. It shows that we are moving on." But minutes later, the NCAA issued a news release that at 9 a.m. the next day in Indianapolis, Emmert and Ray would announce sanctions against Penn State. "Unprecedented" sanctions, the media reported.

"I can't believe this s---," said the trustee. "No one told me a damn thing."

At the news conference, Emmert outlined the sanctions and expressed hope that they would be both punitive and "corrective," helping Penn State change its "football first" culture, which he said had allowed a sexual predator to run amok for a decade. Copies of the consent decree made public credited Penn State for commissioning the Freeh report and for its reaction to the findings. "Acknowledging these and other factors," it read, "the NCAA does not deem the so-called 'death penalty' to be appropriate."

It was co-signed by Emmert and Erickson.

So in the end, a negotiation did occur. It just didn't much involve the university's stewards, the board of trustees.
  Failures of transparency here were compounded by an NCAA unwilling to practice what it was preaching for Penn State.  That is no surprise in a  sense--it is clear that the NCAA was attempting through Penn State to solidify a vertical power relationship.  Among equals, perhaps, omnidirectionality in transparency is possible.  For the collective of university Presidents in the NCAA that could not extend to the body representing the collective of universities in discussion with a single member.  It also suggests the consequences of failures to receive information. In the absence of mutuality only arbitrary conduct can be produced.  And here another tragedy--the arbitrariness of the NCAA in these proceedings also ensured that Penn State would also have to adopt similar stances. The result, of course, was a negotiation that was less about the harvesting and consumption of information in two directions by parties seeking to maximize the value of their communication in an open and engaged manner for the benefit of their respective constituents.  Rather, it was the sort of back room contests of arbitrary power, the form of which was initiated and controlled by the NCAA, that produced the transparency asymmetries that continue to haunt Penn State and the process of responding adequately to the well merited criticisms of its governance cultures (one that remains to be applied as forcefully to its unit administrators as it is being applied to the central administrative apparatus).

What emerges, of course, is failure.  This is a failure with its roots in the decision of the NCAA to ground its response to the failings at Penn State in a manner that has guaranteed that all stakeholders will continue to question the good faith of the actors and the legitimacy of the actions taken for a long time to come.  It has produced distraction where firm and fair action might have been helpful.  It has confirmed the sense that the culture of university presidents (as represented at the NCAA) is horribly flawed, and that these people have lost their way in terms of their loyalty to forms of shared governance, process protections, open and engaged governance that they appear to give lip service to when it suits them and fail utterly to apply when it suits them to achieve a particular result. What this exercise has amply demonstrated, beyond the importance of transparency, in its more complex application, is that university presidents have lost touch with the cultures of governance that have served as a source of their legitimacy.  They will pay the price for this failure, and that is a shame, because it may well imperil the modern university as much as it may punish the arrogance and caste-based blindness that might well have motivated this course of events.

   



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